Under what circumstances might Cream obtain insurance for a franchisee's Shop?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
M 6 OTHER FEES**
| Type of Fee | Amount | Due Date | Remarks 1, 2 |
|---|---|---|---|
| Interest on Late Payment | Lesser of 1.5% per month or the highest commercial contract rate allowed by law | As incurred | All amounts which you owe us for any reason wi |
Source: Item 6 — OTHER FEES (FDD pages 13–17)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, Cream may obtain insurance for a franchisee's shop if the franchisee fails or refuses to obtain and maintain the insurance Cream specifies. In this case, Cream is authorized to procure the necessary insurance on behalf of the franchisee.
If Cream obtains insurance for the franchisee, the franchisee is responsible for paying Cream 120% of the premiums paid. This additional 20% could be considered an administrative or penalty fee for non-compliance with Cream's insurance requirements. The payment is due as incurred, meaning Cream will bill the franchisee promptly after paying the insurance premiums.
This arrangement ensures that all Cream shops maintain the minimum required insurance coverage, protecting both the franchisee and Cream from potential liabilities. Franchisees should ensure they understand Cream's insurance requirements and maintain their own policies to avoid the additional cost of Cream securing insurance on their behalf.